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HRA Minutes 09-06-1989 . MINUTES MONTICELLO HOUSING AND REDEVELOPMENT AUTHORITY Wednesday. September 6. 1989 - 7:00PM City Hall MEMBERS PRESENT: Chairperson Al Larson. Ben Smith. Tom St. Hilaire. Everette Ellison. and Lowell Schrupp (late). STAFF: Jeff O'Neill. Rick Wolfsteller. and Ollie Koropchak. GUEST: Jerry Zimmer and Pat Pelstring. 1. CALL TO ORDER. Chairperson Al Larson called the HRA meeting to order at 7:05PM. 2. APPROVAL OF THE AUGUST 2. 1989 HRA MINUTES. Chairperson Al Larson made one addition to the August 2. 1989 HRA minutes. Item 10. Consideration to Review and Discuss the Billing Statement from Business Development Services. Inc. addition to include that the HRA would like to be advised up front as to when BDS. Inc. billing clock begins to run on individual projects other than TIF projects. . Ben Smith made a motion to approve the amended August 2. 1989 HRA minutes. seconded by Everette Ellison. Passed 4-0. 3. CONSIDERATION OF A NSP PRESENTATION AND REVIEW OF FINAL PLANS. Mr. Jerry Zimmer of the NSP St Cloud Region Office informed the HRA of the 5.124 square foot maintenance building to be constructed in the Oakwood Industrial Park. construction to begin within days. The building will include a small office and have six garage stalls. with employment of eleven. The maintenance building serves the areas of Monticello. Big Lake. Becker. Rogers. St. Michael. Hanover. and rural Dayton. Storage will consist of poles. wire. street lights and some transformers. and be screened with a cyclone fence. Chairperson Larson thanked Mr. Zimmer for his time and presentation. 4. CONSIDERATION TO HEAR A PRELIMINARY CONCEPT FOR USE OF TIF FOR COSTS ASSOCIATED WITH THE GILLE PROPERTY. . Jeff O'Neill informed the HRA members that the city has taken a pro active approach on the Gille property stating that Gille's Auto has an illegal auto license. constitutes blight and public nuisance. and is in violation of the City Zonin~ Ordinance (expansion of an existing non- conforming~slnce 1976). The City has two options: 1) Enforce City Ordinance or 2) for the City or HRA to work with the property owner on a relocation site and to research land and soil correction costs. The HRA could seek land permission entry from the owner for soil testing and substract the testing costs from the land-acquisition cost." . HRA Minutes 9/6/89 Page 2 4. CONTINUED. The HRA recalled when Mr. Metcalf appeared before the HRA about a possible multi housing project in that area and the resistence from the neigbhorhood. It was projected that the increment generated from single housing wouldn't cover the anticipated project costs. The HRA felt it was the sellers responsibility to disclose of any underground tanks to a buyer. The HRA requested City Staff to confirm seller/buyer responsibility of disclosure. check on state funds available for clean-up. and investigate the time frame for development of a PCA plan for abandon tank removal. The HRA members recommended that Jeff O'Neill. Gary Anderson and the City Attorney continue applying pressure on Gille's Auto for the violation of the City Ordinance (expansion of a non-conforming use since 1976). The HRA concluded that this was not the time for HRA involvement however wants to be kept informed. The HRA hasn't turned down the project. 5. CONSIDERATION OF AN UPDATE ON MANTEQ INTERNATIONAL. INC. (BOYLE PROPERTY). . Pat Pelstring informed the HRA that he has spoke with Stewart Wilson regarding the uncompleted business plan and the updated financial statements. Plans were to meet the October Omni financial meeting. Norman Strand indicated that Manteq plans do include expansion to Monticello. Koropchak indicated a letter was mailed to Mr. Boyle of the TIF requirements and the HRA position for a County recorded copy of the subdivision and the need for a drainage plan. Other builders have been contacted for alternative sites. 6. CONSIDERATION TO REVIEW SITE LOCATIONS FOR DAVID FICEK PROJECT. Pat Pelstring responded to David Ficeks Master Plan which included four districts and recommended the HRA commit to only Area A. Mr. Ficek researched the market price with a conclusion of $60.000=$80.000. He is researching the possibility of continued vacant property further to the east for project feasibility. Mr. Pelstring would need to verify the area as a qualified Redevelopment District. Koropchak informed the HRA that some 500 surveys were mailed out and a first look of a good return. Mr. Ficek will tabulate the survey and present the HRA with a copy of the results. Mr. Ficek needs to develop a site plan and acquisition/ redevelopment costs for HRA review. 7. CONSIDERATION OF AN UPDATE FOR THE EXPANSION OF SEVENTH STREET. . Jeff O'Neill informed the HRA members that The Lincoln Companies has a signed letter of intent from K-Mart but no signed lease. City Council has two alternative for the seventh street aligment. One. original plan of a curved road aligment and second. a straight road alignment with a estimated $200.000 acquisition cost for an additional approximate 50.000 sq ft of retail/ HRA Minutes 9/6/89 Page 3 . 7. CONTINUED. commercial development. The Lincoln Companies can live with either alignment, however, K-Mart has not approved parking spaces constituted by either road alighment. Lincoln does agree that the larger retail/commercial lots to the west would encourage larger developments. Staff pointed the straight road alignment would also serve as a buffer between the retail/commercial zoning to the south and the PZM zoning to the north. The original road alignment was approved by previous owner. Rosewood Corporation. and not The Lincoln Companies. Mr. O'Neill presented the HRA with the curved project costs: Road to Minnesota Street, $l61.000; land value of Lincoln Property, $43,000 plus excess land. $8,000 for a total of $2l2,000., Straight project costs: Road to Minnesota Street, $l5l,000; Pratt, l2,000 sq ft $61,000 (.57), Holthaus, 28,000 sq ft $56,320 ($2.00), Demolition $3,000, subtotal $271,320 plus Kraemer l.9 acres $197,000 ($1.41), Demolition $7,000, subtotal $204,000 for a total of $475,320. . Mr. O'Neill suggested the HRA consider the use of TIF for the acquisition of the Pratt. Holthaus. and Kreamer properties plus demolition costs for a total of $307,320 less the land sales of Kraemer ($70,000) and Holthaus ($17,000) for net cost of $237,320. Road construction would be assessed the benefitting property owners. Mr. Pelstring suggested the land owners negotiate with their renters for a signed renters compensation agreement for hardship or relocation cost. The HRA felt the benefitting developer could purchase the Holthaus and Pratt property (plus demolition) and put the road in and still recover the approximate $235,000 ($233,250) through the K-Mart and future larger commercial developments. The HRA was not convinced that the proposed $307.320 cost for the acquisition of land could be justified or recovered by the HRA in exchange for an approxiate addition of 50,000 sq ft of land. Staff was unable to put a dollar value on the anticipated future larger developments. Staff indicated the project was the straight road alignment, a public purpose (public improvements) which would encourage larger development of Monticello retail/commercial area which the approximate annual $100,000 increment would retire the debt service in 3-3! years. The Lincoln Companies project would create some l65-l80 part time and full time jobs and consist of 86,000 sq ft. . . HRA Minutes 9/6/89 Page 4 7. CONTINUED. Additional commen~s by the HRA: City Council can establish a TIF District, how would the HRA look, Lincoln Companies have not indicated a no go on the project without the use of TIF, acquisition for street improvements and assessment should be handled under the normal city process, K-Mart lease decreases and Lincoln Companies values and revenues increase, if had choice would rather see a Target, do the right thing up front, HRA is drivers seat, relatively small cost to the City for curved road alignment. Mr. Pe1string reminded the HRA that the key issue tonight was to make a finance decision on the use of TIF as Lincoln Companies anticipate a September 27 beginning grading date. Staff informed the HRA that its suggested recommnedation was not for direct assistance to the developer,however, did agree it was an indirect assistance which encourages the future retail/commercial development in Monticello. Hopefully opening the City of Monticello as a Regional Retail/Commerical Area. . The HRA considered the TIF policies which determines the project valuation. Out of the eight considerations: 4 were yes, 2 were no, and 2 were maybe. The HRA recommended the benefitting property developer (The Lincoln Companies) acquire the Holthaus and Pratt properties and put in the Seventh Street straight road alignment to Minnesota Street. Also, the HRA recommended the use of TIF for the acquisition of the Kraemer property ($197,000) with an anticipated land resale of $70.000 to $100,000. The City then to assess the benefitting property owner (Hornig) for street improvements along Seventh Street with an approximate cost to the tax payers (TIF) of $100,000. 8. OTHER BUSINESS. Mr. Pelstring presented the HRA with a revised Agreement between the HRA and BDS, Inc. The HRA tabled the item to the next meeting. 9. ADJOURMENT. Everette Ellison made a motion to adjourn the HRA meeting, seconded by Tom St. Hilaire. The meeting adjourned at 10:30PM. . ~ ~C1\O~~ Ollie Koropchak HRA Executive Secretary